Herriott Corporation Has Two Operating Divisions-An Atlantic Division and a Pacific

question 29

Multiple Choice

Herriott Corporation has two operating divisions-an Atlantic Division and a Pacific Division.The company's Logistics Department services both divisions.The variable costs of the Logistics Department are budgeted at $43 per shipment.The Logistics Department's fixed costs are budgeted at $209,000 for the year.The fixed costs of the Logistics Department are determined based on peak-period demand. At the end of the year,actual Logistics Department variable costs totaled $246,960 and fixed costs totaled $217,870.The Atlantic Division had a total of 3,000 shipments and the Pacific Division had a total of 2,600 shipments for the year.For performance evaluation purposes,how much actual Logistics Department cost should NOT be charged to the operating divisions at the end of the year?

• A)$8,870
• B)$15,030
• C)$6,160
• D)$0